Options Trading News

A huge put roll in the SPDR Energy Fund was the biggest option trade of yesterday's busy session.

optionMONSTER's Depth Charge system shows that a block of 78,000 September 98 puts was sold for $2.80 against previous open interest of 81,366. At the same time, 78,000 October 95 puts were bought for $2.20 in volume well above that strike's open interest of 16,991, clearly a new position.

The trade was done with the XLE at $97.16. The total volume of 181,982 was more than 10 times the daily average for the last month.

This could be a diagonal spread, which would be looking for the XLE to rebound to right around $98 by expiration in mid-September. But it is more likely that the trader is rolling the puts forward by a month to a lower strike as the fund fell in price. The latter could be an outright bearish position or a hedge to protect long stock. (See our Education section)

The XLE fell 2.16 percent to $96.63 yesterday, its lowest close since June 5. The exchange-traded fund was at a high of $101.52 on June 23.

The other Greeks (Gamma, Vega, and Theta) are calculated by using month and strike data, and not by individual option. These are called strike-based Greeks. Gamma, Theta, and Vega are all strike-based Greeks

optionMONSTER® provides stock market insight, advanced options education, and actionable trade ideas to meet the needs of do-it-yourself investors. After spending decades in the trading pits of Chicago, Jon 'DRJ' and Pete Najarian founded the company in 2005 to help people better manage their own investment portfolios.